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Journal of Hydrology 529 (2015) 1235–1246
Contents lists available at ScienceDirect
Journal of Hydrology
journal homepage: www.elsevier.com/locate/jhydrol
Mutually beneficial and sustainable management of Ethiopian
and Egyptian dams in the Nile Basin
Befekadu G. Habteyes a, Harb A.E. Hasseen El-bardisy b, Saud A. Amer c, Verne R. Schneider d,
Frank A. Ward e,⇑
a
Water Science and Management Program, New Mexico State University, Las Cruces, NM 88003, USA
Department of Agricultural Economics and Agricultural Business, Al-Azhar University at Assiut, Egypt
US Geological Survey, International Water Resources Branch, 12201 Sunrise Valley Dr., Reston, VA 20192, USA
d
Remote Sensing and Water Resources Administration, US Geological Survey, International Water Resources Branch, USA
e
Department of Agricultural Economics and Agricultural Business, New Mexico State University, Las Cruces, NM 88003, USA
b
c
a r t i c l e
i n f o
Article history:
Received 16 July 2015
Received in revised form 5 September 2015
Accepted 7 September 2015
Available online 15 September 2015
This manuscript was handled by Geoff
Syme, Editor-in-Chief
Keywords:
Nile
Reservoir storage
Water sharing
Benefit sharing
Pareto Improvement
Negotiated settlement
s u m m a r y
Ongoing pressures from population growth, recurrent drought, climate, urbanization and industrialization
in the Nile Basin raise the importance of finding viable measures to adapt to these stresses. Four tributaries
of the Eastern Nile Basin contribute to supplies: the Blue Nile (56%), White Nile-Albert (14%), Atbara (15%)
and Sobat (15%). Despite much peer reviewed work addressing conflicts on the Nile, none to date has
quantitatively examined opportunities for discovering benefit sharing measures that could protect
negative impacts on downstream water users resulting from new upstream water storage developments.
The contribution of this paper is to examine the potential for mutually beneficial and sustainable benefit
sharing measures from the development and operation of the Grand Ethiopian Renaissance Dam while
protecting baseline flows to the downstream countries including flows into the Egyptian High Aswan
Dam. An integrated approach is formulated to bring the hydrology, economics and institutions of the
region into a unified framework for policy analysis. A dynamic optimization model is developed and
applied to identify the opportunities for Pareto Improving measures to operate these two dams for the four
Eastern Nile Basin countries: Ethiopia, South Sudan, Sudan, and Egypt. Results indicate a possibility for one
country to be better off (Ethiopia) and no country to be worse off from a managed operation of these two
storage facilities. Still, despite the optimism of our results, considerable diplomatic negotiation among the
four riparians will be required to turn potential gains into actual welfare improvements.
Ó 2015 Elsevier B.V. All rights reserved.
1. Background
In much of the Nile Basin, rainfall patterns as well as climate
limit water supply, use, and economic development opportunities.
Water resources in that basin could be more efficiently, equitably,
and sustainably managed if the riparian nations involved could
come to a mutually acceptable agreement on allocating the Basin’s
supplies. In the face of growing evidence of climate change and
variability, it is unlikely that overall supplies in this basin will
increase, though debates on this question continue to occur
(Sherif and Singh, 1999). Hydroelectric power supplies 32 percent
of Africa’s energy. Still, per capita power consumption in Africa is
⇑ Corresponding author.
E-mail addresses: [email protected] (B.G. Habteyes), [email protected]
(H.A.E. Hasseen El-bardisy), [email protected] (S.A. Amer), [email protected] (V.R.
Schneider), [email protected] (F.A. Ward).
http://dx.doi.org/10.1016/j.jhydrol.2015.09.017
0022-1694/Ó 2015 Elsevier B.V. All rights reserved.
the lowest in the world; access to electricity is uneven; power supplies are often unreliable; conflict has damaged existing services in
some areas; only 3 percent of the Nile Basin’s potential has been
currently developed for hydroelectricity (United Nations
Environmental Program, 2010).
Debates over water rights and access to the Nile likely predate
the written record (Allen, 1997). Some of the oldest surviving written records of water use patterns of the Nile comes from the
ancient Egyptians (Bell, 1970). Today (2015), the Nile continues
to have major economic importance for all 11 riparians’ national
security and community livelihoods.
1.1. Institutions
The Nile has supported civilization for centuries. In 1133–73,
the Ethiopian king, Lalibela, presented a plan to divert the Nile
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but was discouraged from doing so in part because of a willingness
by the Egyptians to pay an annual tribute to protect the Nile’s
inflows into Egypt (Hecht, 1988). In 1902, after 20 years of
Egyptian occupation by Great Britain, an Anglo-Ethiopian treaty
was signed and included a passage that precluded construction
of any storage facility on the Blue Nile (Kendie, 1999). In 1927,
Ethiopia sent Workineh Martin to recruit American Engineers to
Lake Tana to formulate a development plan (Abraham, 2002). In
1929 another agreement was signed between Egypt and Great
Britain stipulating a plan to preclude water storage developments
at the headwaters of the Nile (Kendie, 1999). Cooperation between
the US and Ethiopia brought a physical survey of the Nile in 1930
(Abraham, 2006), taking more than three decades to finish at a cost
of $9 million.
In 1959, Egypt signed a second bilateral agreement with Sudan
on use of the whole Nile, for which Ethiopia was not a signatory
(Abdalla, 1971). Later, Ethiopia was hit by two recurrent, sustained,
and catastrophic drought-induced famines. The first occurred in
1973–74 and the second 1984–85 with high suffering that could
have been reduced with greater storage combined with collaboration from the downstream countries (Abraham, 2004). Storage
supplied by the High Aswan Dam (HAD) in Egypt enabled Egypt
to avert the cost of both droughts.
A HYDROMET project was established by the communities of
the Equatorial Lakes to gather hydro-meteorological data on the
Nile River. It became operational over the period from 1967 to
1992. In 1992, another cooperation, TECCO NILE (technical
cooperation committee for the Promotion of Development and
Environmental Protection of the Nile Basin), established a framework for negotiation (Abseno, 2013). In 1999, the ministers of
water affairs of many of the Nile Basin countries formed
NBI-Nile Basin Initiative constituted of Nile-COM (Council of
Ministers), Nile-TAC (Technical Advisory Committee) and NileSEC (Secretariat). Though the NBI still operates in 2015, another
cooperative agreement emerged known as CFA (Mekonnen,
2010). Under this arrangement a number of upstream states,
including Ethiopia, Kenya, Uganda, Rwanda, Tanzania and Burundi have made concerted efforts to accelerate the formulation
of the CFA. This was initiated in May 2010 to put bounds on
the control that Egypt and Sudan had secured on the waters of
the Nile Basin (Mekonnen, 2010).
In 2011, for the first time in history and after many decades of
completed surveys, Ethiopia started building a dam on the Nile for
hydropower generation, the Grand Ethiopian Renaissance Dam
(GERD). The site for the dam had been initially identified by the
United States Bureau of Reclamation during a Blue Nile survey conducted from 1956 to 1964. The Ethiopian Government surveyed
the site in 2009 and 2010. In 2011 a US $4.7 billion contract was
awarded, and the dam’s cornerstone was laid in April of that year
by Ethiopia’s prime minister. It is slated to be operational in
2017 (Whittington et al., 2014).
Currently, Africa generates 4% of the world’s electricity and
according to a 2010 World Bank report, 24 percent of the population in Sub-Saharan Africa has access to electricity (Crousillat
et al., 2010), while other low income countries have reached
40 percent coverage. In 2010, Egypt’s electricity coverage per
capita achieved 3.0 times the level of Sudan as well as 4.4 times
that of Ethiopia (Tesfa, 2013). Power demands by Ethiopia have
been growing at an average rate of 25 percent per year since
2010, and demand forecasts by 2020 are 32 percent per annum
from the Ethiopian Electric Power Corporation. The GERD as
designed stands to increase the current Ethiopian power capacity
by a factor of three. Under some plans, the power would be
exported to other East Africa countries where the price is high
enough to economically justify export.
1.2. Research literature
Much research has been presented in peer reviewed journals,
and many secondary data sources have been analyzed. In 2004,
the hydro- and geo-politics of Africa were investigated, from which
an integrated management of water resources as well as a basin
system cooperation was seen as a measure that could bring about
welfare improvements to all countries (Kitissou, 2004).
Mathematical mass balance, numerical routing, and multiple
regression models were used to study the effect of new water projects in upper Egypt on hydropower generation and different scenarios of discharging, inflows, and heads (Abdel-Salam et al.,
2007). Such approaches can be used to indicate flow allocations
based on technical relationships that can secure mutually beneficial water allocation and power production relation between GERD
and the Aswan High Dam (HAD). This approach was used to investigate Sudan’s midstream riparian-position, power and policy
using principles of hydro-hegemony after Sudan’s emergence as
an oil-exporting country (Saleh, 2008).
A 2009 work recommended that Egypt reconsider its position
with respect to the basin and prepare for the potential of reduced
future supplies (Dinar, 2009). In the subsequent year, a study was
published analyzing the dynamics of power relations and its influence on the management and allocation of shared Nile water
resources (Zeitoun et al., 2010).
One investigation examined the importance of thresholds in
greenhouse gas concentrations above which associated climate
change impacts become economically, socially or environmentally
unacceptable. The question was posed by investigating potential
impacts of climate change on the water resources of the Nile River
and associated impacts on the Egyptian economy through the use
of a general equilibrium model. Results showed that Egypt
increased its dependence on imports to meet food demand, greatly
decreasing grain self-sufficiency, while increasing protein selfsufficiency (Strzepek, 2000).
Another investigation analyzed alternative water futures for the
Ganges and Nile Basins using a combined green and blue water
accounting framework. Results showed the importance of green
and blue water accounting, showing a range of agricultural and
technology policy options for increasing global crop productivity
across a span of potential futures in these basins (Sulser et al.,
2010). A recent work investigated a dynamic water accounting
framework for the Eastern Nile Basin in which the basin was treated as a value chain with multiple services including production
and storage (Tilmant et al., 2015). Another recent paper developed
a hydro-economic model that links a reduced form hydrological
component, with economic and environmental components. The
findings were applied to an arid region in southeastern Spain to
analyze the effects of droughts and to assess alternative drought
and climate adaptation policies (Kahil et al., 2015).
Work on the hydro-politics of the Nile Basin investigated
unconventional solutions to the water problem (Yohannes, 2009).
The author concluded that sustainable Nile water governance
could succeed if it treated local hydrological communities as a
building blocks for regional hydrological integration. Using principles of virtual water flows of the Nile Basin for water, the authors
measured water consumed by selected crop and livestock products
(Zeitoun et al., 2010). Results confirmed that virtual water trade
occurs where it is economically feasible. A related work (Biswas
and Tortajada, 2012) indicated the difficulties of assessing impacts
from dams and attributing benefits and costs to one single activity
due to many factors.
A 2013 article examined the relevant international law
surrounding the debates between Egypt and Ethiopia over the
latter country’s construction of the GERD on the Blue Nile, and
B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
recommended a balanced diplomatic engagement to move forward
(Yihdego, 2013). Another study from that year assessed the
distributional aspect of various allocation schemes applied to the
Blue Nile in Africa using a game theory approach (Dinar and
Nigatu, 2013). They indicated that more allocation of water for irrigated agriculture by Ethiopia could produce a potential return flow
benefits for downstream countries. Another 2013 study attempted
to estimate the benefits of the GERD project for Sudan and Egypt
based on World Bank data. Results showed a 200% improvement
in the value of power supplied to Ethiopia, an 86% removal of silt
and sedimentation in Sudan and Egypt, as well as a steady water
flow and avoidance of flood damages and water conservation
benefits in the Ethiopian highlands (Tesfa, 2013).
A recent investigation on filling options of the GERD conducted
a quantitative analysis of water resources management to show a
reduced risk of hydrological variability and optimum upstream
regulation capacities (Mulat and Moges, 2014). To defuse the
tension between Ethiopia and Egypt and suggest directions for a
win–win deal, a study on the Nile Basin (Whittington et al.,
2014) identified a modest set of losses from GERD to downstream
riparians, based on the recognition that hydropower is largely a
non-consumptive water use.
GERD filling options were evaluated using a climate adaptation
approach (King, 2013). The author recommended either percent or
threshold based filling policies depending on potential futures for a
changing climate. Win–win solutions were found to have some
potential, but may require coordination and cooperation beyond
a simple filling policy. A 2014 work estimated the quantity of
water in the GERD reservoir under five scenarios of Dam elevation
capacity, 88, 117, 137, 145 and 170 meters, by using a Digital Elevation Model (Ali, 2014).
The water professional community has been alerted to seek
alternatives and policy proposals that incur lower costs and/or
higher benefits (Merrey, 2009). Integrated models are needed for
comprehensive benefit-cost measure of the economically efficient
allocation of water, including demand management, supply
enhancement, or combinations (Booker et al., 2012). In a Cooperative Game Analysis of Transboundary Hydropower Development in
the Lower Mekong (Bhagabati et al., 2014), the authors observed
that greater cooperation has the potential to raise the minimum
level of net benefits for the worst off country, although it provides
no guarantee of higher aggregate net benefits summed over riparians (Cascao, 2008). The widely-publicized Helsinki Rules
(International Law Association Committee on the Uses of the
Waters of International Rivers, 1967), United Nations Convention
on International Waters (McCaffrey and Sinjela, 1998), and Berlin
Rules (International Law Association, 2004) have influenced the
history of cooperation over shared waters across the world, and
have become part of international customary law. A contentious
but primary point of discussion was the conflict between the principles of ‘‘equitable apportionment” vs ‘‘no significant harm”
between the parties, typically upstream and downstream
(Chokkakula, 2012; Ward, 2013).
In investigating the economic value of coordination in largescale multi-reservoir systems of the Parana River, the authors
found that gains could be secured for each riparian, offering valuable information to support negotiations and benefit sharing
arrangements received by different agents (Marques and Tilmant,
2013). There is a range of cooperative options that may inform
riparians in determining workable modes of cooperation (Sadoff
and Grey, 2005). The concept of hydrosolidarity can be an important principle used to balance numerous interests with asymmetrical power that exists within a river basin (van der Zaag, 2007).
Benefit-sharing arrangements can play a major role in reconciling the interests of upstream and downstream states (McIntyre,
2015). A 2013 study assessed infrastructure development, along
1237
with cost sharing arrangements, offer the possibility of allowing
riparian countries to move closer to benefit-sharing positions that
are mutually acceptable (Wu et al., 2013).
1.3. Gaps and objectives
Many forums have been prepared, research conducted, institutions established, and water sharing arrangements proposed, but
few or none have reduced Egypt’s concerns of unfavorable outcomes that would stem from a renegotiated multi-national agreement for sharing flows of the Nile at or downstream of Ethiopia. On
the other hand Ethiopia continues to face a long history of periodic
poverty and hunger, partly driven by unreliable control over water
supplies for hydropower, irrigation, and commercial tourism benefits that could be secured with greater control. Despite many
meetings, committee discussions and debate among ministers of
the riparian countries, results have been mostly inconclusive with
few effective signed documents.
Moreover, no peer reviewed literature to date has quantitatively examined opportunities for a practical benefit sharing
arrangement, under which at least one country could be better
off with no country being worse off with the development and
management of new storage infrastructure on the Nile. Results
from this research could give insight into opportunities for altered
water development and use patterns that are Pareto Improving, in
which at least one country is better off and no other country is
worse off economically.
This research aims to fill some gaps excluded from previous
research and not yet achieved despite a long history of attempted
political negotiation. It does so by examining the potential for
mutually beneficial and sustainable benefit sharing management
from operation of the Ethiopian Grand Renaissance and Egyptian
Aswan High Dams. The approach of this paper is to construct,
apply, and interpret findings from an empirical hydro-economic
model developed for and applied to the Nile Basin. Results from
the model are used to search for benefit sharing arrangements in
which all countries in the basin could be at least as well off with
as without the construction and operation of the Ethiopian dam.
It seeks to identify an operation plan for the dam that could produce a Pareto Improving pattern of water use throughout that part
of the Basin in or downstream of Ethiopia. The optimized pattern of
discounted net economic benefits investigated by our research has
a mission of providing tangible and measurable potential for practical integrated management that could inform basin level cooperation (Biswas, 2004).
2. Methods of analysis
2.1. Study area
The Nile rises from two origins. The first is from 1600 m above
sea level in Northern Burundi, the White Nile. The second, the Blue
Nile, originates near Lake Tana, 1800 m above sea level in the
Ethiopian Highlands (United Nations Environmental Program,
2010). From south to north, the main river sub-basins flowing from
the Ethiopian highlands into Sudan are illustrated in Fig. 1. The
Grand Ethiopian Renaissance Dam is being constructed on the
40 km long reach of the Blue Nile, from the Ethiopian-Sudan border
in the Guba districts of Ethiopia on Blue Nile River, largest tributary
of the Nile.
A number of headwater locations, river gauges, water use
nodes, and reservoir nodes were investigated, shown in the schematic of Fig. 2. The figure is based on existing tributaries of the
Nile, actual river flow measuring gauges, and irrigated regions
along the river in each of the four Eastern Nile Basin countries
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B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
Fig. 1. Nile Basin Study Area.
shown above. Also shown are the two mega-dams on the Nile. A
mass balance of the hydrology of the Nile was used to configure
the geometry and network of the flow of the Nile River in the basin
in preparation for the development of an optimization model,
implemented using the GAMS (General Algebraic Modelling System) software described on the vendor’s home page at gams.com.
2.2. Data
Fig. 2 shows the four major headwater contributors to the Nile.
These include the Albert Nile, the Baro-Sobat River, the Blue Nile
and the Tekeze-Atbara River. All sources, except the first are from
the Ethiopian Highlands. To account for stochastic flow under normal climate variability, the headwater flows were simulated over
40 years of recent history (Blackmore and Whittington, 2008).
Based on the recent trend of climate change in the past few years
in the Nile basin, the headwater supplies for a dry scenario were
set at 75 percent of the normal flow years (FAO, 2014) and (NBI,
2014). This, of course, is a major assumption, for which considerable ongoing and still unresolved debate continues to occur in
the scientific literature and in the policy debate sphere.
2.3. Economics
2.3.1. Efficiency
Our analysis examines alternative water allocations for irrigation, recreation, and power over space and time. It investigates a
set of water allocations that achieves an algebraic maximization
of the discounted net present value of economic benefits summed
over uses, riparians, locations, and time periods, while also respecting a number of institutional, political, and hydrologic constraints.
The three economic benefit-producing uses of water used for
this study are hydroelectric power production, tourist based recreation, and farm income. The three uses are summed over time periods, locations within countries, and countries with and without the
GERD in place. Important constraints include a sustainability
requirement and a political/justice international water allocation
constraint. In principle, if the price of water includes all real marginal costs, an efficient resource allocation can be found for which
marginal net economic benefits of water are equal across different
uses. If such measures could be found, the basin’s water-related
economic welfare is made as high as possible with available water
(Briscoe, 1996), sometimes termed most economically efficient.
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B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
N
Edfina
Zia
2
3
Rosea
Damiea
Delta
1
Aswan_dn
Aswan_up
6
Dongola
Atbara
5
4
Hesnab
Set
3
3
Thmaniat
Kos
Kassala
Khartoum
1
2
Ro seires
3
Sobat
Gerd_up
2
2
Legend
Bahir Dar
1
1
Headwater inflow
Reservoir
River gauge
Irrigated Places
Naonal borders
Baro
Fig. 2. Nile River Basin Schematic.
2.3.2. Equity
In 2002 the United Nations adopted a declaration:
November 2002, the Committee on Economic, Social and Cultural Rights adopted General Comment No. 15 on the right to
water. Article I.1 states that ‘‘The human right to water is indispensable for leading a life in human dignity. It is a prerequisite
for the realization of other human rights”. Comment No. 15 also
defined the right to water as the right of everyone to sufficient,
safe, acceptable and physically accessible and affordable water
for personal and domestic uses (United Nations, 2002).
Under the declaration, the right entitles everyone to sufficient,
safe, acceptable, physically accessible and affordable water for personal and domestic uses. Equity takes on an important role for our
analysis, for which it is defined as operating the GERD so that all
countries at or downstream of it are as well or better-off with
the storage as without it. Practically, this constraint requires
searching for a way to ensure that economic benefits from water
use patterns could be as high or higher for Ethiopia and for all
downstream countries of Ethiopia, including Sudan, South Sudan,
and Egypt.
In principle, this notion of basin wide equity could potentially
be implemented if the completed GERD stored water by reducing
irrigation water use within Ethiopia. Another possibility is to fill
the GERD during wet years or seasons of the year, after which
releases occurred during the dry seasons or years. This second view
sees the regulatory role of the GERD as a mechanism to control and
manage flows of the Nile throughout any given year and across
years so that the downstream countries will be no worse off while
Ethiopia will be better off economically.
2.3.3. Sustainability
By one definition, sustainable development is development that
meets the needs of the present without compromising the ability
of future generations to meet their own needs (Brundtland et al.,
1987). Our analysis implements a kind of sustainability goal by
way of setting lower bounds on the sustainable use of water
resources as well as sustained ecosystem stability and resilience
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B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
in the process of filling and operating GERD. By imposing this constraint on the reservoir storage volume, equally sustainable water
supplies and uses under both policy alternatives (without and with
the dam) is protected.
2.4. Basin scale framework
The basin scale analysis treats the entire part of the basin in our
study area as an integrated unit. The hydrology, economics and
institutions of the Nile Basin at and downstream of the GERD were
integrated within a single framework for policy analysis. The
model begins with four major headwaters: the Blue Nile (Abbay),
Atbara (Tekeze), Sobat (Baro-Akobo) and White Nile (Albert),
(Fig. 2). Countries upstream are not hydrologically affected by
the GERD. In terms of total economic benefit, two important priced
water uses are irrigated agriculture and actual as well as potential
hydropower production. Unpriced tourism-based recreation values
are also included for both storage projects.
A regional integrative approach presents a benefit to managing
the water, energy and food nexus from the use of the transboundary water resource, as shown in a recent study of Central Asia
(Jalilov et al., 2013). This approach is applied in the present
research with more quantitative measurement of the uses from
each sector. Hydro economic models offer a management resource
to efficiently and consistently integrate hydrologic, economic, and
institutional impacts of policy proposals to support basin scale
cost-benefit environmental and economic assessments (Ward,
2009). A study using portfolio analysis investigated the importance
of larger benefits by considering a diversified portfolio of options
for adapting to a diverse set of demands in an extensive geographic
setting using integrated hydroeconomic analysis (Rosenberg et al.,
2008).
A dynamic optimization framework was used to formulate the
model presented here. The General Algebraic Modeling System
(GAMS) permits the building of large maintainable models that
can be adapted quickly to new water supply conditions, economic
conditions, or policy debates that emerge. The model is used for
headwater sources, crop water demands per unit land, crop yield,
time, crop prices, and are assigned for a predefined sets of hydrological attributes. That configuration is used to discover the constrained economically optimum values of the hydrologic,
agronomic, institutional, technical, and economic variables. These
variables include crop output, land use, energy and water use as
specified by empirical hydrologic and economic relations. Results
from each climate scenario and each policy choice required separate models. Four models were run, one for each combination of
two reservoir developments and two climate scenarios. The analysis seeks to protect the status quo or better in total benefits of
water use, with development and operation of the GERD that could
promote win–win cooperation, reducing the potential for, extent
of, cost from, and burdens shouldered by conflict.
2.5. Strategic approach
Our strategy investigates a politically constrained economic
optimization of water for the three major uses of water in the
basin: hydropower, irrigated agriculture, and recreation. Water
level variability at the two reservoirs provide a framework to guide
thinking. In coordination with optimized inflow, storage, and
release patterns, the GERD needs to be filled to a level where it
can produce an economically beneficial level of hydropower, while
protecting the water stocks in the HAD to an equal level as would
occur without the GERD’s presence, as well as assuring beneficial
use of flows used for irrigation in the downstream countries. This
is a tall order. It requires a considerable amount of planning, ingenuity, calculation, review, and adjustment where needed.
In the search for policies that could achieve this ambitious mission, we initially considered three policy alternatives associated
with storage at the GERD:
Reducing irrigation water use from Ethiopia to allow additional
water to flow into the GERD for hydropower production while
not reducing downstream deliveries.
Reducing water deliveries to downstream countries to contribute
to the same.
A combination of both.
Either option (2) or (3) makes it difficult to achieve a Pareto
Improvement without additional infrastructure development,
since either option would release less water downstream for beneficial use. Bearing that in mind, only the first alternative is considered for this article, as only it could produce a policy outcome that
assures that no country is worse off overall with the GERD than
without it (mathematical appendix). We hope to pursue various
elements of the last two options at a future time.
Results of our constrained optimization are used to investigate
whether the development and management of the GERD could
take advantage of several conditions:
Hydropower and irrigated agriculture can be complementary
uses of water.
The flow-regulating function of the GERD can raise the Nile’s
low flows in dry periods and limit peaks of potentially dangerous flood flows.
A roadmap could be provided for virtual water flow and regional power trade.
The GERD could supply a mechanism to make higher valued
crop specialization more profitable, as it could permit crop
demands to better timed for high valued crops that are sensitive
to the timing of water applications.
3. Results
3.1. Overview
Results shown in Tables 1–6 reveal several overarching messages. A primary message with important policy implications is
that the development and operation of the GERD has the potential
to reach a Pareto Improving outcome, making at least one country
better off and no country worse off with as without its storage.
These results provide a resource to guide debates over the practical
opportunity for a concept introduced in 2005 as benefit sharing
(Sadoff and Grey, 2005). A primary message of our findings is that
this potential for a benefit sharing outcome is shown to occur
under both the base and dry climate scenario.
Nevertheless, an important secondary message tempers these
sanguine findings: The four riparian countries will need to undertake considerable political negotiation in the search for settlements
to secure these potential benefits for all countries that are indicated
only as potential outcomes by our results. Third, protecting base
levels of economic welfare or better (without the GERD) for the
downstream countries requires Ethiopia to fill its dam from reductions in its own agriculture water use.
Large-scale hydropower plants like GERD with storage can
partly de-couple the timing of hydropower generation from variable natural river flows. Large storage reservoirs may be sufficient
to buffer seasonal or multi-seasonal losses from the costs of very
low or very high flows. Although not presented in our results, considerable hydropower production potential from the GERD could
allow Sudan to export more of its diminished petroleum production to the international market by importing cheap and environmentally friendly hydropower from Ethiopia.
B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
1241
8.9
8.9
11.8
14.8
Avg
14.8
11.1
11.1
13.5
13.5
10.1
10.1
50.6
50.6
37.9
37.9
11.8
9.0
8.9
8.2
9.0
8.9
8.9
8.5
8.4
9.0
9.1
8.7
9.6
8.9
9.3
8.7
9.2
8.7
9.0
7.9
9.2
9.0
8.9
8.2
9.0
8.9
8.9
8.5
8.4
9.0
9.1
8.7
9.6
8.9
9.3
8.7
9.2
8.7
9.0
7.9
9.2
12.0
11.9
10.9
12.0
11.8
11.8
11.3
11.3
12.0
12.1
11.6
12.8
11.9
12.5
11.7
12.2
11.6
12.1
10.5
12.3
14.8
15.2
15.3
13.6
14.5
14.3
14.7
15.7
14.4
15.0
14.3
15.3
14.5
14.6
16.4
14.5
14.0
14.0
15.2
15.9
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
14.8
15.2
15.3
13.6
14.5
14.3
14.7
15.7
14.4
15.0
14.3
15.3
14.5
14.6
16.4
14.5
14.0
14.0
15.2
15.9
11.1
11.4
11.5
10.2
10.8
10.7
11.0
11.8
10.8
11.3
10.7
11.4
10.9
11.0
12.3
10.8
10.5
10.5
11.4
11.9
11.1
11.4
11.5
10.2
10.8
10.7
11.0
11.8
10.8
11.3
10.7
11.4
10.9
11.0
12.3
10.8
10.5
10.5
11.4
11.9
12.7
14.0
14.2
13.0
12.8
13.5
12.8
12.9
13.9
14.6
15.0
13.1
13.4
12.9
13.4
13.3
13.1
12.8
14.8
14.1
12.7
14.0
14.2
13.0
12.8
13.5
12.8
12.9
13.9
14.6
15.0
13.1
13.4
12.9
13.4
13.3
13.1
12.8
14.8
14.1
9.5
10.5
10.6
9.8
9.6
10.1
9.6
9.7
10.5
10.9
11.2
9.8
10.0
9.6
10.1
10.0
9.9
9.6
11.1
10.5
9.5
10.5
10.6
9.8
9.6
10.1
9.6
9.7
10.5
10.9
11.2
9.8
10.0
9.6
10.1
10.0
9.9
9.6
11.1
10.5
52.5
48.1
51.9
53.0
52.1
46.4
55.2
51.7
50.4
54.1
53.2
54.5
46.9
46.0
48.0
48.0
48.6
53.2
49.0
48.2
52.5
48.1
51.9
53.0
52.1
46.4
55.2
51.7
50.4
54.1
53.2
54.5
46.9
46.0
48.0
48.0
48.6
53.2
49.0
48.2
39.4
36.1
38.9
39.8
39.1
34.8
41.4
38.8
37.8
40.6
39.9
40.9
35.2
34.5
36.0
36.0
36.5
39.9
36.8
36.2
39.4
36.1
38.9
39.8
39.1
34.8
41.4
38.8
37.8
40.6
39.9
40.9
35.2
34.5
36.0
36.0
36.5
39.9
36.8
36.2
12.0
11.9
10.9
12.0
11.8
11.8
11.3
11.3
12.0
12.1
11.6
12.8
11.9
12.5
11.7
12.2
11.6
12.1
10.5
12.3
wo_dam
wo_dam
wi_dam
wo_dam
wi_dam
wi_dam
wo_dam
wo_dam
wo_dam
wi_dam
wo_dam
wi_dam
wo_dam
wi_dam
Base
4-Atbara_h_f
3-BlueNile_h_f
Base
Dry
2-Sobat_h_f
Base
Dry
1-Albert_WN_h_f
Base
Year
Table 1
Synthesized headwater supply by source, year, storage development policy, and climate scenario (Billion Cubic Meters/Year).
Dry
wi_dam
Dry
wi_dam
3.2. Water
3.2.1. Headwater flows
Table 1 shows synthesized flows for the four headwater sources
of the Nile we used for our model: The Albert White Nile,
Baro-Sobat, Blue Nile and Tekeze-Atbara. They were designed to
replicate the year-to-year mean and variance of supplies at those
four sources for the base climate scenario, as well as replicating
75% of mean flows for the dry climate scenario. In that table as well
as the remaining ones, the abbreviation ‘wo_dam’ stands for
‘without the Ethiopian dam,’ while ‘wi_dam’ stands for ‘with the
Ethiopian dam.’ The stream gauge abbreviations are described in
the map schematic Fig. 1.
All sources of the Nile except the Albert rise in the Ethiopia
Highlands, for which the three Ethiopian sources contribute about
86% of the Basin’s total. The remaining 14% is contributed by the
Albert, originating from Lake Victoria. Headwater supplies are
identical with and without the GERD Dam since, with the exception of micro-climate effects, building the dam will have no major
effect on supplies entering the system.
3.2.2. Streamflow gauges
Table 2 shows predicted annual streamflow levels throughout
the Nile Basin, by Gauge, Policy, and Climate Scenario. Flows at
all gauges below the GERD are directly influenced by the reservoir’s operation. Flows are shown only for a 20 year average to
limit use of space. Detailed year-by-year flows are available from
the authors on request. Flows in table are shown for all 26 mainstem and tributary locations and tributaries of Nile River for the
four countries used for our model.
These gauges include the Nimule, a source of Albert Nile headwater in South Sudan; Baro, source of Sobat Nile headwater at
Ethiopia; Bahir Dar, source of Blue Nile headwaters at Ethiopia,
and Kassala, source of Atbara Nile headwater at Ethiopia. Gauges
at the lower ends of the basin occur at Edfina and Zifta Gauges in
Egypt, the approximate location of the outflow to the Mediterranean. Reductions in river flow between any two gauges indicate
net quantities of water depleted by water users (ungauged sources
minus uses) in the river reach between the gauges. Net depletions
are diversions minus return flow that make it back to the river subsequent to diversion.
Three important features can be seen from this table. First, the
table shows impacts of the development and operation of the
GERD on each of the downstream gauges as well as the overall flow
patterns of the Basin. Second, impacts are shown from reduced
overall flows in the dry scenario with and without the GERD.
Finally, the table shows the water redistribution impact of the
GERD among gauges. For both base and dry scenarios, entries in
contiguous columns show the difference in flows without the
dam compared to with the dam.
Under the ‘change’ column, a positive/negative entry indicates
that greater/less gauged flow would occur under ‘with Dam’ policy
at a given river gauge, compared to the ‘without Dam’ policy. In
comparing the without Dam and with Dam policy, a positive
change in flow can only occur with reduced agricultural use or
increased reservoir releases or a combination of the two. For example, the Dinder gauge in Ethiopia shows 2.13 bcm more streamflow
for the base climate scenario and 1.38 bcm more streamflow for
the dry scenario with the dam than without. This occurs because
the GERD takes water from the upstream agricultural use within
Ethiopia. The gauge immediately downstream of the GERD, Ro Series, shows that under historical supply conditions, there is no
change in water under both the normal and dry scenario with
and without the dam.
For a given level of total supply of water flowing into the HAD in
Egypt, higher reservoir releases reduce the HAD’s reservoir storage
1242
B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
Table 2
Predicted streamflow by gauge, policy, and scenario, averaged over future years, 20 years.
River gauge
Country of gauge
Average river flow at gauge (Billion Cubic Meters/Year)
Base
Nimule
BE_Zeraf
Baro
BAP
Sobat
Malakal
ElRenk
Kosti
BahirDar
Dinder
Ro_seires
Khartoum
Thmaniat
Hesnab
Kassala
Setit
Atbara
Berber
Dongola
Aswan Inflow
Aswan Outflow
Delta
Rosetta
Damietta
Zifta
Edfina
South Sudan
South Sudan
Ethiopia
Ethiopia
Ethiopia
South Sudan
South Sudan
South Sudan
Ethiopia
Ethiopia
Sudan
Sudan
Sudan
Sudan
Sudan
Sudan
Sudan
Sudan
Sudan
Sudan
Egypt
Egypt
Egypt
Egypt
Egypt
Egypt
Basin
Dry
Without dam
With dam
Change
Without dam
With dam
Change
14.81
14.46
13.52
13.27
12.57
27.03
26.33
21.59
50.56
48.06
48.06
46.73
68.32
67.66
11.82
11.57
10.91
78.57
76.94
75.46
61.44
24.52
12.26
12.26
2.31
2.39
14.81
14.46
13.52
13.27
12.57
27.03
26.33
21.17
50.56
50.19
48.06
46.73
67.90
67.24
11.82
11.57
10.91
78.15
76.79
75.46
61.44
24.52
12.26
12.26
2.31
2.39
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.42
0.00
2.13
0.00
0.00
0.42
0.42
0.00
0.00
0.00
0.42
0.15
0.00
0.00
0.00
0.00
0.00
0.00
0.00
11.11
10.76
10.14
9.96
9.25
20.01
19.31
17.07
37.92
36.04
36.04
34.17
51.24
50.16
8.86
8.68
7.50
57.65
55.61
53.53
43.72
21.71
10.86
10.86
2.05
2.13
11.11
10.76
10.14
9.96
9.25
20.01
19.31
16.62
37.92
37.42
36.04
34.31
50.93
49.29
8.86
8.68
7.78
57.07
55.37
53.53
43.72
21.71
10.86
10.86
2.05
2.13
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.44
0.00
1.38
0.00
0.13
0.31
0.87
0.00
0.00
0.28
0.59
0.24
0.00
0.00
0.00
0.00
0.00
0.00
0.00
White Nile
White Nile
White Nile
White Nile
White Nile
White Nile
White Nile
White Nile
Blue Nile
Blue Nile
Blue Nile
Blue Nile
Nile
Nile
Blue Nile
Blue Nile
Blue Nile
Nile
Nile
Nile
Nile
Nile
Nile
Nile
Nile
Nile
Table 3
Water use and farmland in production of staples and non-staples by riparian, policy, water supply scenario, averaged over 20 year time horizon.
Country
Policy
Water in production (BCM/year)
Staples
Base
Land in production (million Ha)
Non-staples
Dry
Staples
Base
Dry
Non-staples
Base
Dry
Ethiopia
wo_dam
wi_dam
2.87
2.54
2.12
1.95
0.12
0.22
0.12
0.12
0.92
0.66
0.68
0.51
0.02
0.03
0.02
0.02
South Sudan
wo_dam
wi_dam
1.24
1.24
1.24
1.24
0.52
0.52
0.52
0.52
0.27
0.27
0.27
0.27
0.05
0.05
0.05
0.05
Sudan
wo_dam
wi_dam
8.55
8.55
8.55
8.55
1.95
1.95
1.95
1.95
1.80
1.80
1.80
1.80
0.18
0.18
0.18
0.18
Egypt
wo_dam
wi_dam
52.47
52.47
35.27
35.27
4.28
4.28
4.28
4.28
12.59
12.59
8.66
8.66
0.51
0.51
0.51
0.51
Table 4
Storage volume and power produced by riparian, policy and supply scenario, averaged
over 20 year time horizon.
Reservoir
Policy
Storage volume
(BCM)
Climate
Power
production
(GWH/year)
Climate
Base
Dry
Base
Dry
1-GERD_res_s
wo_dam
wi_dam
0.00
12.75
0.00
7.53
0
11,338
0
7580
2-ASWAN_res_s
wo_dam
wi_dam
121.10
121.10
91.53
91.53
12,900
12,900
8582
8582
volume and at the same time increases the flow rate immediately
below the HAD. Outflows at the two last gauges in Egypt, Zifta and
Edfina, match flows both with and without Dam, ensuring that
‘with Dam’ policy protected environmental values are associated
with outflows to the Mediterranean, which we label protection
guarding against seawater intrusion.
A closer look at Table 2 also shows that the ‘with Dam’ policy
results in no overall change in predicted flows at the lower end of
Base
Dry
the basin with the GERD compared to without it. This indicates
no change in outflow from the basin that would occur in the face
of the regulating mechanism supplied by the GERD. There is a
reduction in flows in both the base and dry climate scenario at
one of the gauges of South Sudan (Kosti) (Haregeweyn et al.,
2015) and four of the gauges in Sudan (Thmaniat, Hesnab, Berber
and Dongola). An additional regulating role of the GERD reallocates
the Nile’s waters throughout the basin so that benefits are optimized to the greatest extent possible while also protecting respect
for the Pareto (economic) Improvement requirements established
by our analysis.
Table 2 also reveals the geographic distribution of the 26
gauges, showing five each for Ethiopia and South Sudan, ten for
Sudan and six for Egypt. Flows at these gauges indicate how much
water flows into, within, and out of each country by climate and
policy scenario. For example, column three of Table 2 shows an
average of 48.1 bcm crossing the border from Ethiopia to Sudan
without the dam under base climate conditions, while another
tributary from Ethiopia carries 12.57 bcm of water to South Sudan.
The Albert White Nile adds flow to South Sudan at the Nimule
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B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
Table 5
Total economic benefits by country, policy, water supply scenario, and water use (million, discounted, US$, summed over 20 year time horizon).
Country
Climate
Policy
Ethiopia
Base
wo_dam
wi_dam
wo_dam
wi_dam
18,401
4414
13,597
5418
0
20,202
0
13,452
0
1114
0
638
0
4600
0
4600
18,401
25,729
13,597
19,508
18,401
21,129
13,597
14,908
wo_dam
wi_dam
wo_dam
wi_dam
2160
2160
2160
2160
0
0
0
0
0
0
0
0
0
0
0
0
2160
2160
2160
2160
2160
2160
2160
2160
wo_dam
wi_dam
wo_dam
wi_dam
17,916
17,916
17,916
17,916
0
0
0
0
0
0
0
0
0
0
0
0
17,916
17,916
17,916
17,916
17,916
17,916
17,916
17,916
wo_dam
wi_dam
wo_dam
wi_dam
151,065
151,065
95,884
95,884
4721
4721
3168
3168
11,672
11,672
8862
8862
0
0
0
0
167,458
167,458
107,915
107,915
167,458
167,458
107,915
107,915
wo_dam
wi_dam
wo_dam
wi_dam
189,541
175,554
129,556
121,377
4721
24,922
3168
16,621
11,672
12,785
8862
9500
0
4600
0
4600
205,933
213,262
141,587
147,498
205,933
208,662
141,587
142,898
Dry
SouthSudan
Base
Dry
Sudan
Base
Dry
Egypt
Base
Dry
Total
Base
Dry
Irrigation benefit
Energy benefit
Table 6
Economic value of one additional unit of water (shadow price) at Blue Nile headwater
above the Grand Renaissance Ethiopian Dam, by year, policy, and climate scenario (US
$ Per 1000 Cubic Meters).
Headwater
Blue Nile
Year
wo_dam
wi_dam
Base
Dry
Base
Dry
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
238.91
469.45
217.33
206.84
197.09
201.75
192.32
183.28
162.44
166.30
147.44
150.91
143.75
127.42
121.34
115.48
109.99
104.67
99.68
102.04
492.93
469.45
447.10
425.81
405.53
386.22
367.83
350.31
333.63
317.74
302.61
288.20
274.48
261.41
248.96
237.11
225.81
215.06
204.82
195.07
492.93
531.99
457.98
425.81
405.98
397.67
367.83
350.31
333.63
317.74
302.61
288.20
274.48
261.41
248.96
237.11
225.81
215.06
204.82
195.07
492.93
525.60
455.52
425.81
405.53
386.22
367.83
350.31
341.82
340.66
342.48
348.48
357.29
371.36
388.47
407.94
430.28
455.48
482.97
514.45
Average
172.92
322.50
326.77
409.57
gauge that receives 14.81 bcm of water from Uganda, originally
sourced at the Equatorial Lakes. Sudan receives 26.33 bcm of water
from South Sudan and 59.8 bcm from Ethiopia, which sums to
86.13 bcm and delivers 75.46 bcm to Egypt at the entrance to the
Aswan Dam at the Aswan upper gauge. Among other things, this
respects the institutional constraint in favor of the status quo
water agreement between Egypt and Sudan meets the 1959 Nile
Treaty flows.
3.3. Agriculture
3.3.1. Water use
Table 3 shows water use and farmland in production by crop
type, riparian, policy, and water supply scenario, averaged over
the 20 year time horizon. Under the constrained optimization
results, Ethiopia is predicted to use an annual average of 2.87 bcm
Recreation benefit
Dam cost
Gross benefit
Net benefit
of water from the Nile system for its irrigated agriculture for the
base climate scenario. Under a dry climate scenario, average water
use is predicted to decrease to 2.12 bcm per annum. By contrast,
downstream countries including South Sudan and Sudan use the
same amount of water for each climate scenario and each reservoir
development policy. These results re-affirm that the politically constrained reservoir operation presents an opportunity to supply an
Actual Pareto Improvement, defined earlier in the paper. Egypt in
this case will be affected by change in the climate conditions, showing reduced water consumption by 31%, because of the large differences in headwater supplies between the base and dry climate
scenario. This shows that climate change stands to be an important
factor leading to declines in water supply and agricultural water use
in Egypt as well as in other parts of the basin.
Tabled results show that GERD could possibly be developed and
operated to produce no negative impact on the water supply and
irrigated agriculture of Egypt or other downstream riparians. Home
to the largest irrigated agriculture in the basin, Egypt diverts and
consumes much more water for irrigated agriculture than the
other three riparians combined. Under the ‘no dam’ policy Egypt
is shown by our results to consume on average 56.75 bcm water
during the base period and 39.54 bcm for the dry climate scenario.
Ethiopia uses the second smallest amount of Nile water for irrigated agriculture according to our data sources.
3.3.2. Land
Table 3 also presents the important message that total irrigated
land in production shows no reduction with the GERD compared to
without it for the downstream countries. For operation of the GERD
to achieve an Actual Pareto Improvement, Ethiopia is shown to
decrease its agricultural land by 270,000 ha from the Nile Basin
flows at the base climatic scenario due to the reduced water from
the agricultural use used to supply water storage to the dam. On
the other hand, model results shown in the table indicate that
the GERD has the potential to allow Egypt to maintain its status
quo level of irrigated land for both the base and dry climate
scenarios.
A close inspection of the table reveals that the operation of the
GERD dam has the potential to promote a higher income crop mix,
especially a mix associated with higher income crop specialization.
These results point to an opportunity for crop selection and
specialization after the construction and operation of the GERD.
1244
B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
A Pareto Improving use of water could result in more land for
highly profitable non-staple crops. Non staple crops typically
require more stable water supplies.
On the other hand, benefits from the Nile River in Sudan and
South Sudan have little to no effect as a consequence of the construction and operation of the dam with respect to their irrigated
crop selection. Greater detail could be presented by a model with
a quarterly or even monthly time step compared to the annual
time step we used. While excluded from the model results, it is
possible that the operation of GERD has the potential to serve as
a mechanism to raise the economic profitability of the crop mix
within each riparian with dam compared to without it. These
impacts of the dam on the cropping pattern of the region are
shown for staple crops, including major grains (maize, wheat, sorghum) as well as selected vegetables. Non-staple crops include
major cash crops such as cotton and sugar cane, for which the
GERD could increase production because of the greater reliability
of flows with the dam.
3.4. Energy
3.4.1. Reservoir storage
Table 4 shows the storage volume and the corresponding power
production by reservoir, GERD development policy, and water supply scenario average over 20 years. The results from the table show
that the GERD is filled only to about one-fifth of the design capacity
averaged over that period. This is due to the constraint imposed
that requires filling of the GERD only from reduced irrigation water
use within Ethiopia to meet the stringent and demanding requirements of Actual Pareto Improvement.
A closer look at Table 4 show that the trends in the GERD filling
process throughout the 20 years bear little relation with equivalent
trends in HAD. The average volume of HAD reservoir with the dam
is the same as without the dam both at the base and the dry climate scenario. This means filling options undertaken by this study
do not affect the volume of the HAD in Egypt. Egypt could potentially be at least as well off with constant levels at the HAD under
the dry climate scenario from the base climate scenario. This
occurs because of the sustained release from the GERD for
hydropower generation throughout all periods, even during the
dry climatic scenario.
3.4.2. Energy production
Table 4 also summarizes results of hydropower production for
GERD in Ethiopia and the HAD in Egypt by climate scenario and
GERD development policy. The second data row contains Ethiopian
hydropower production potential with the construction and operation of the GERD averaged over the coming 20 years. A minimum
of 7580 GWH (dry climate) and a maximum of 11,309 GWH per
year (base climate) is forecast by our analysis to be potentially generated from the GERD.
From the last two rows of Table 4, results show that Egypt
would produce equal levels of power output at the HAD, at
12,900 GWH per year (base climate) as well as 8582 GWH per year
(dry climate) with and without the GERD. That means that the construction and operation of the GERD has the potential to avoid negative impacts on hydropower production supplied by the HAD. The
reason for this is that the Ethiopian dam is shown in the model to
be filled only to about one fifth of its capacity, a result that comes
from reducing irrigated agriculture from Ethiopia’s use of the Nile
upstream of the GERD.
A closer look at Table 4 indicates that the electricity production
from GERD may decrease by one third on average for the dry
climate scenario as compared to the base climate scenario. On
the other hand, according to the option taken for this research,
HAD hydropower production is constrained to be unaffected and
this is shown by the results from the Table where the amount of
electric power generated by HAD is the same with the dam as
without it.
Generating this much electricity for Ethiopia, GERD has the
potential to have little significant effect on the hydropower generated by HAD. Egypt is predicted to produce equal electric power
from HAD, with the GERD in place than without it. This occurs
because the release from the GERD causes an unchanged level of
the HAD reservoir storage volume. If the reservoir volume of
HAD increases, the head of the dam increase which increases its
hydropower generation.
3.5. Economics
3.5.1. Economic value of agriculture
Table 5 shows that agricultural, energy and recreational benefits of the four riparian has different values and trends throughout
the forecasted period. Ethiopian agricultural benefit shows fluctuation both ‘with the dam’ and ‘without the dam’ policy and with
the base and dry climate scenario. Due to the construction and
operation of GERD, Ethiopia will lose $1,218 million every year
on average and a total of $15,130 million over the forecast 20 years
period from reductions in irrigated agriculture.
This loss in Ethiopian agricultural benefits is forecast by our
optimization results to be more than offset by the large additional
benefits from the hydroelectricity and modest recreational values
of the new Dam. Both Sudan and South Sudan have the same agricultural benefit over the reservoir policy and climate scenario and
throughout the 20 years as they show unchanged water use for
irrigated agriculture. While Egypt’s agricultural benefit is not
affected by the GERD development, it is highly affected by the climate scenario. Thus, during drought periods, Egypt is shown to
lose on average $5,467 million every year to native water supply
shortages and a discounted total of $59,543 million lost from a
dry climate, both with and without the GERD being built upstream.
3.5.2. Economic value of energy
Table 5 also shows the energy benefits from hydropower generation by country, Ethiopian reservoir development policy and
climate scenario. The hydropower price for Ethiopia is (optimistically) estimated at $ US 0.15 per kW h, about seven to eight times
the Egyptian electricity tariff. Multiplying the hydroelectric power
production in Table 4 above with its corresponding price equals
the hydropower benefit from the two dams. Averaged over
20 years, there will be a yearly average hydropower energy benefit
of $1.21 billion during the base period and $855 million during the
dry climate scenario.
3.6. Total economic benefit
Table 5 shows total discounted net economic benefits over
20 years by country, policy, water supply scenario, and water use
category. Examining the case of Ethiopia, results show that the loss
of agricultural benefit and the expense for the construction of the
dam will be more than offset by considerable addition in economic
benefits from the hydroelectric power benefits added to augmented recreational benefits from the newly built and operated
storage capacity.
Ethiopia could experience a gain in total net benefit of about
$2.6 billion for the base climate scenario and $1.3 billion for the
dry climate scenario. Total net benefits for the midstream riparian
including Sudan and South Sudan shows no change with and without the Ethiopian storage policy and the climate scenario. The first
reason for this is our Actual Pareto Improvement constraint that
requires all riparian countries’ total benefit to be at least as high
with the GERD dam as without it. A second reason is the effect of
B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
the GERD regulating effect on the downstream river regime. A third
reason sometimes forgotten is that the tradeoffs in water use
between irrigation and hydropower production can be complementary. That is, a reservoir release at the dam could be used to
generate hydropower as well as irrigate downstream croplands.
Properly managed, a single cubic meter of water can be used many
times from the headwaters to the sea.
The complementarity characteristic of water use between
hydropower production and irrigated agriculture leads to
expanded basin benefits. Thus, despite reduced agricultural benefit, the absolute total economic benefit of Ethiopia increased by
13.7% with the dam than without it. Moreover, the GERD protects
against welfare losses for all downstream countries. For instance,
Egypt’s discounted net economic benefits as well as the total basin
wide total show no change for both climate scenarios.
Results presented in this analysis indicate only possibilities.
Benefits shown by our results make no guarantee of those benefits
being realized. Water negotiators will not necessarily take advantage of benefit sharing arrangements that improve all riparians’
welfare predicted by this study. Still our results clearly indicate
the potential of win–win outcome that could be secured through
a carefully negotiated settlement among the four riparians at and
downstream of Ethiopia’s new dam.
3.7. Shadow prices
Table 6 shows the economic value of an additional 1000 cubic
meters of water at the headwaters of the Blue Nile if it could be
made available. That economic value of the additional river flow
comes by putting that water to its best use somewhere in the basin
while respecting all the constraints placed upon that use of the
water discussed earlier in this paper. Results are shown by year,
reservoir development policy, and climate scenario. Values of water
are measured in $US per 1000 cubic meters at the headwaters.
These values provide important information supporting decisions made for the Nile Basin water community. Members of that
community include ordinary water consumers, urban water suppliers, power buyers and suppliers, ministry personnel, and other
water stakeholders who wish information on the performance of
measures that would discover and/or develop alternative sources
of water.
Examples of new sources of water include additional groundwater aquifers discovered through remote sensing, successful
well-drilling, desalination, and the like. It could also include water
importation, investments in water conservation technology that
substitutes labor, land, or infrastructure for water, or measures to
mitigate (proven) climate change or climate variability. Other possibilities are measures to increase groundwater recharge, weather
modification, rainwater harvesting, and development of additional
storage. Institutional measures for finding additional supply can
include actions like reducing existing demands for water, raising
or restructuring water tariffs, clarifying the legal right to use water,
and introducing of economic measures for finding new water such
as water trading.
Several patterns emerge from Table 6:
The marginal value of water increases with the GERD in place
compared to without that storage in place. This occurs because
a reservoir with greater storage capacity has greater powers of
regulation for handling fluctuations in headwater supplies. A
larger reservoir capacity produces a higher marginal value,
especially in drier years, because of its greater utility in putting
fluctuating supplies to high valued economic uses, rather than
having to send unused water downstream or, worse yet, facing
the risk of no water in the reservoir in dry years (Hurst, 1956).
1245
Marginal values are generally higher under the reduced flow climate scenario. This occurs because the scarcity value of additional water increases as water scarcity grows.
Marginal values are higher in drier years, such as years 2, 3, and
6, as shown by comparing Table 2 (headwater supplies) and
Table 6 (marginal values). Marginal values are generally lower
under scenarios for which the GERD is not built, since given
headwater supplies are less able to be used at the preferred
time without a reservoir to regulate those supplies.
4. Discussion
This investigation has examined the potential for mutually beneficial and sustainable benefit sharing measures from operation of the
Ethiopian Grand Renaissance and Egyptian Aswan High Dams. It has
identified how and where water could be allocated and used to
achieve the objective of an Actual Pareto Improvement. A constrained
dynamic optimization model was developed to identify the potential
for a Pareto Improving operation that guards against negative
impacts associated with the development of the GERD for the four
Eastern Nile countries: Ethiopia, South Sudan, Sudan, and Egypt.
Headwater flows, river flows, water use patterns, reservoir storage volume, and their associated economic values were among the
variables optimized to identify the potential impacts and benefits
of the GERD. Discounted total economic benefits over a 20 year
period for each country can be at least as large with both dams
in place as with only the existing High Aswan Dam. This opportunity for a benefit sharing result could provide a real motivation for
dialogue and cooperation among these countries.
Findings from this research have the potential to inform multilateral negotiations through information provided by results of our
optimized water allocation constrained by the requirements of a
politically acceptable benefit sharing arrangements. In addition,
these findings also could guide unilateral decision making for each
riparian country as out results also show economically optimized
cropping and hydropower production patterns.
With Ethiopia planning to increase its electricity generation
through schemes such as the Grand Renaissance Dam, Sudan
may anticipate importing more electricity from Ethiopia. The
results of this research could serve as guidance for win–win negotiations between Ethiopia and Egypt, from which the former could
be relieved from its age old burden of poverty and hunger and the
latter seeing protection of its water supply.
Other alternatives of water allocation and benefit analysis could
profitably be explored in future work. While not examined in this
analysis, significant amounts of water could possibly be conserved
by storing more water at the GERD and less at the HAD for the purpose of reducing overall system evaporation from Ethiopia’s higher
elevation and cooler climate (Tadesse, 2008). Another example is a
reduced burden of growing stocks of silt or reduced costs of silt
removal. Either benefit could prolong the effective life of the
HAD, an idea developed more fully elsewhere (Tadesse, 2008).
Future work could profitably examine more impacts excluded
from this study. There could be expanded basin wide benefits of
industry developed as a consequence of additional affordable electric power in the basin. This is properly considered a consumer surplus associated with reduced power prices in Ethiopia compared to
existing levels, or greater quantities at existing prices. A power
price forecasting model would be most useful. Including these
effects could provide a more comprehensive foundation to inform
water policy decisions for improved management of the Nile Basin
system. Still, even with all this additional analysis discussed, considerable diplomatic negotiation among the four riparian states
will be required to turn potential gains into actual on-the-ground
welfare improvements.
1246
B.G. Habteyes et al. / Journal of Hydrology 529 (2015) 1235–1246
Acknowledgements
The authors are grateful for financial support by the New
Mexico State University (USA) Agricultural Experiment Station,
U.S. Geological Survey International Division, US Agency for International Development, and Al-Azhar University at Assiut, Egypt.
Appendix A. Supplementary material
Supplementary data associated with this article can be found, in
the online version, at http://dx.doi.org/10.1016/j.jhydrol.2015.09.
017.
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